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Sime Darby’s indirect unit ordered to pay RM427m to CCCC Tianjin Dredging

14 Jan 2020 / 23:33 H.

PETALING JAYA: Sime Darby Bhd’s 36.63%-owned joint venture company Weifang Port Services Co Ltd (WPS) has been ordered by the Qingdao Maritime Court in China to pay the outstanding sum of RMB711 million (RM427 million) and late payment interest to CCCC Tianjin Dredging Co Ltd.

The Court also ruled that the defendants WPS and Weifang Port Group Co Ltd are jointly and severally liable for the payments.

On Aug 7, 2019, WPS had appealed against the Court’s decision to dispute the calculation of late payment interests.

“The outstanding sum of RMB711 million has been accrued in the accounts of WPS as at June 30, 2019 while the late payment interest is being accrued progressively,“ Sime Darby said in a stock exchange filing.

WPS is a joint venture company between Weifang Port Group Co Ltd (WPG) (38%), Weifang Sime Darby Port Co Ltd (WSDP) (37%) and Shandong Hi-speed Transport & Logistics Investment Co Ltd (25%). WSDP is an indirect 99%-owned subsidiary of Sime Darby.

Tianjin Dredging was engaged to construct a 35,000 deadweight tonne main channel in Weifang, Shandong Province, China. Under the terms of engagement, both WPG and WPS are jointly liable for any payments due to Tianjin Dredging.

The project was completed in November 2016 at a total cost of RMB1.17 billion, of which RMB741 million remains outstanding.

On July 31, 2018, Tianjin Dredging filed a lawsuit in the Court against WPS and WPG claiming payment of the outstanding sum plus interest, in addition to legal costs and costs for preservation of assets.

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